Business reporter Hayley Millar"Members appear to be split on the issue" real 28kHayley Millar reports"Standard Life will use its resources to fight this campaign vigorously" real 28k

Tuesday, 25 April, 2000, 18:14 GMT 19:14 UK

Boost for carpetbaggers' hopes

Fred Woollard welcomed the board's decision

Standard Life has agreed to consider whether or not policyholders should have their say on carpetbaggers' plans to abandon mutual status.

Directors of the insurance society said that, if enough support was shown, they would call a special general meeting following demands by some policyholders that it should become a public limited company.

The chairman of Standard Life, John Trott, told the institution's annual general meeting in Edinburgh that the interests of the company would be best served by retaining mutual status

We remain competitive, efficient and well capitalised, and see our future as a strong company ... and run purely for our members

Chairman John Trott

The move came after the man leading the campaign for demutualisation, Fred Woollard, handed in a requisition at the company's headquarters in the city, in his attempt to secure a ballot.

Demutualisation would result in about 2.3m customers qualifying for windfall payments averaging £6,000, based on Standard Life's estimated value of £15bn.

However, the board has expressed its oppositon to the bid by the internet-based Standard Life Members' Action Group, which Mr Woollard heads, because it believes floating on the Stock Exchange would lead to a conflict of interest between shareholders and with-profits policy holders.

Bosses will defend mutual status

Mr Woollard, who has the public backing of Barclays Global Investors, said he was confident that his challenge would be successful, not least because a poll
suggested 90% of members wanted a vote on demutualisation.

The 37-year-old fund manager would stand to gain £150,000 from second-hand insurance policies he has purchased in the group.

Mr Trott acknowledged the demutualisation request by
Mr Woollard, but urged members to reject his plan and retain mutual status.

He told members: "We remain competitive, efficient and well capitalised, and see our future as a strong company ... and run purely for our members."

He said he planned to contact members about the position.

'High rollers'

"At first sight we believe this to be a valid requisition. If it is and is properly supported by a number of members, we will convene a special meeting to allow members to express their views.

"We will be writing to all members to set out the board's views and recommendations.

Mr Woollard welcomed the board's decision and told members: "I feel that a long term policy holder will do very well with Standard Life as a mutual or a plc, but I still believe it will do far better as a plc."

If Standard Life does float as a company on the Stock Exchange it could hold its own in the insurance sector, with a price tag of around £15bn, according
to City analysts.

But pro-mutual organisations were less than happy.

Bob Goodall, of Save Our Building Societies, said: "The attempt to butcher one of the UK's most successful mutual life assurance companies is the work of
professional carpetbaggers and high rollers."